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COLLABORATIVE TECHNOLOGIES CRITICAL TO THE FINANCIAL INDUSTRY'S DEVELOPMENT OVER THE NEXT THREE YEARS

London - Reuters, the financial information, news and technology group, today released findings of a research report commissioned from Gartner Consulting, which reveals that 86 per cent of financial institutions think collaborative technologies, such as instant messaging (IM), will have a significant impact on their industry over the next three years.

The report is based on in-depth interviews conducted with senior IT executives in 28 of the worlds leading financial organisations and Gartner's continuous research programmes covering the collaboration space and financial services sector. It finds that collaboration technologies have the potential to deliver huge advances in real-time communication and business processes. However, to achieve this financial institutions must think strategically about how they are used, an approach currently lacking in 70 per cent of the organisations surveyed.

Gartner defines collaboration as "working together towards a common purpose
in which the participants are committed and interdependent, with individual
and collective accountability for the results". The research reviews the
role of collaborative technologies and how financial institutions can
harness these to their advantage.

Key findings from the research include:

* 75 per cent of financial institutions described their efforts to improve collaboration via IT as important to critical. Over half expect to increase spending in this area over the next two years.

* The top business drivers for deploying collaborative solutions are improving customer service, productivity and efficiency gains. The major barriers identified are user behaviour and resistance to change, ability to demonstrate return on investment and security concerns.

* Over half of those interviewed expect the use of instant messaging solutions to grow over the next one to two years. Gartner predicts that by 2005 IM will be integrated into 50 per cent of applications that businesses use to directly interact with customers.

* Over 50 per cent are currently using or piloting instant messaging within their organisation and aim to extend this capability externally to reach partners and customers.

* The benefits of enterprise IM include the ability to add a human dimension to electronic interactions, enhance internal communications, and to hold real-time dialogue to reduce the speed of problem solving.

* 94 per cent highlighted 'presence', the ability for users to know which of their instant messaging partners are online at any time, as a key feature of IM.

* By 2003 free IM (consumer IM available via the internet)will be found in 70 per cent of enterprises implemented by end-users without their organisations sanction or support. Financial institutions must avoid the use of 'free IM' (consumer IM) and deploy enterprise IM technology (supported and controlled by the institution).

* The risks of free IM includes unguaranteed reliability, a lack of security due to operation across public networks, vulnerability to spam, and a failure to meet financial services regulatory compliance requirements to automatically log, store and track messages.

* The pace of deployment of collaborative solutions globally varies. Financial institutions in North America are most advanced, followed by Europe and then Asia Pacific.

Gartner Consulting concludes that collaboration is a primary business model
and significant business imperative. The research report makes a series of
recommendations to assist financial institutions benefit from collaborative
solutions, including:

* To achieve the full benefits of collaboration, financial institutions should embrace it at a strategic level across the whole organisation.

* Deploy collaborative solutions to address specific 'pain points' in the business process - i.e. customer service, back-office operations and product development.

* Take advantage of instant messaging but avoid 'free' services which introduce security and business risks.

* Establish corporate guidelines to ensure the appropriate use of IM and ensure systems comply with financial services industry regulations.

Ed Cordin, Director, Gartner Consulting, said: "We estimate that by 2003
free instant messaging solutions, such as those available over the Internet
today, will be found in 70 percent of enterprises. It is imperative that
organisations do not rely on such solutions to support critical business
functions such as communication with customers. Financial organisations need
to look now to implement solutions that can be controlled by the enterprise
and address issues such as lack of security, absence of auditing and logging
facilities, and reliability. We are telling financial organisations to get
strategic. Use instant messaging as part of a viable business model for
collaboration and you will reap the benefits."

Lewis Knopf, Reuters Managing Director of Collaboration Services, said:
"Collaboration is becoming a primary business model that is vital to service-oriented businesses such as financial institutions. The Gartner report demonstrates the potential of collaboration and collaborative technologies but also highlights the importance of approaching such technology with a clearly defined business strategy. With the emergence of instant messaging technology, the opportunities for real-time collaboration and the application of this technology are huge."